Canadian Dollar Advances On Oil Rally As IEA Sees Signs Of Rebalance

9/13/2017 7:41 AM ET

The Canadian dollar climbed against its key counterparts in the European session on Wednesday amid higher oil prices, as the International Energy Agency noted that the oil markets are rebalancing with crude output falling for the first time in five months in August and inventories of oil stocks in industrialized nations nearing the five-year level.

Crude for October delivery rose $0.46 to $48.69 per barrel.

In its monthly report, the Paris-based agency indicated that global oil demand rose 2.3 million barrels per day in the second quarter, the highest since mid-2015, given stronger than expected consumption in Europe and the US.

The IEA also upped the demand growth for 2017 to 1.6 million barrels per day.

Within the OECD total, product stocks were only 35 million barrels above the five-year average at end-July and could soon fall below it because of the impact of Hurricane Harvey, it said.

Investors await the U.S. Energy Information Administration's weekly crude inventories report, due at 10:30 am ET. Economists forecast a build of crude inventories by 3.2 million barrels in the week ended September 8, falling short of 4.6 million barrels increase registered last week.

Meanwhile, European stocks were trading in a lackluster note, as investors moved to the sidelines awaiting further clarity over North Korea and U.S. President Donald Trump's tax reform bill.

The loonie showed mixed performance in the Asian session. While the currency fell against the aussie and the euro, it held steady against the yen. Against the greenback, it advanced.

The loonie advanced to 1.2135 against the greenback, from a low of 1.2186 hit at 5:00 pm ET. The loonie is likely to target resistance around the 1.19 region.

Following a 2-day low of 1.4590 hit at 9:45 pm ET, the loonie climbed to 1.4532 against the euro. If the loonie extends rise, 1.44 is possibly seen as its next resistance level.

Figures from Destatis showed that Germany's wholesale prices increased at the sharpest pace in four months in August.